Interest Studio Workspace
Configure parameters with instant real-time calculation & comparative analytics
Currency:
Step 1: Choose Calculation Engine
Step 2: Adjust Deposit & Rate Parameters
रु
रु 1,000रु 25 Lakhsरु 50 Lakhsरु 1 Crore
% p.a.
1%8%12% (Avg Nepal Bank)24%36%
1 Yr10 Yrs20 Yrs30 Yrs
Live Calculation ResultSimple Interest
Total Maturity / Payable Amount (A)
रु 1,36,000
Net Gain: +36% over 3.00 years
Principal: 74%Interest Gain: 26%
Original Deposit (P)रु 1,00,000
Total Interest Earned+ रु 36,000
Simple Interest vs. Compound Interest: Complete Financial Guide for Nepal
Learn exact formulas, banking rules, and how interest calculation impacts loans, savings accounts, and fixed deposits (FD) across Nepali commercial and development banks.
1. What is Simple Interest (SI)?
Simple Interest is calculated solely on the original principal deposit amount. Because interest does not accumulate onto previous interest, your annual earnings remain perfectly constant from year 1 to year 30.
Standard SI Formula:
SI = (P × R × T) / 100
Where P = Principal, R = Rate % p.a., T = Time in Years.
2. What is Compound Interest (CI)?
Compound Interest is the "interest on interest" mechanism. Each period (Yearly, Quarterly, or Monthly), earned interest is added to your principal balance, causing future returns to accelerate exponentially.
Standard CI Formula:
A = P × (1 + R / (100 × n))^(n × T)
Where n = Compounding frequency (e.g., 4 for Quarterly Nepal bank FDs).
Standard Interest Rules in Nepali Commercial & Development Banks
| Account / Deposit Type | Default Calculation Mode | Standard Compounding Frequency | Tax Withholding (TDS) |
|---|---|---|---|
| Normal Savings Account | Compound Interest (Daily Balance) | Quarterly (Every 3 Months) | 5% on Interest Earned |
| Fixed Deposit (FD / Muddati) | Compound or Simple Payout | Quarterly / At Maturity | 5% (Individuals) / 15% (Institutions) |
| Personal / Home / Car Loans | Reducing Balance EMI (Compound) | Monthly Amortization | N/A (Borrower pays interest) |